What is the 179D federal tax deduction?

Section 179D of the Federal Tax Code provides a tax deduction for energy efficiency improvements to commercial buildings.
A building may qualify for a tax deduction under Section 179D not to exceed $1.80/ft² for whole building performance or $0.60/ft²
for a partially qualifying property for envelope, heating, ventilating, and air conditioning (HVAC), or lighting improvements.
In addition, a building may qualify with a reduced installed lighting power under
the interim lighting rule. Energy simulations are required to show compliance with the energy and power cost savings requirements. View more detailed information.

What is the 179D DOE Calculator?

The 179D DOE Calculator is a DOE approved tool that provides calculations to determine eligibility for the 179D federal tax deduction as a substitute for other modeling software.
The 179D DOE Calculator provides pre-simulated results to determine qualification for both the partial and interim compliance pathways.

Is my building eligible to use the 179D DOE Calculator?

Although many common building types
are included in this tool, some building types and configurations may not be eligible. By clicking on the "Start your Estimate" button
below, you will enter the 179D DOE Calculator and be asked to enter six building characteristics to determine your
eligibility. If a building is not eligible to use the 179D DOE Calculator, qualification for the 179D tax deduction can be determined with separate modeling using a different
modeling tool.

Eligible buildings can use the 179D DOE Calculator to determine qualification for lighting, envelope, and HVAC system. A 179D DOE Calculator Results Report will be provided as documentation
of the qualification and eligibility status. The report does not preclude the need for a certification of the property performance from a qualified individual (a licensed contractor or
engineer in the jurisdiction of the building location).

What are the different compliance pathways for qualification for the 179D tax deduction?

At the end, you will receive a 179D DOE Calculator Report that states your eligibility status to use the 179D DOE Calculator for tax qualification purposes, as well as any tax qualifications as a result of your retrofit. This report can be used as documentation to submit to the Internal Revenue Service when applying for the 179D tax deduction.

The next step is to provide additional information on your energy efficiency upgrade including: lighting, building envelope; and heating, cooling, and hot water systems. Based on these inputs energy saving calculations will be performed to determine if the retrofit qualifies for the 179D deduction.

Learn more about publications, tools, and links that can help you improve the energy efficiency of your commercial building.